After what seemed like a long period of stagnation, and the pervasive use of complex, on-premise core HR systems, a raft of new cloud-based software has seen a shake up of the human resources software market.
These new entrants - which have been coming thick and fast - have been built cloud-first. They’ve incorporated new(er) trends such as mobile, analytics, self-service portals, and video. Their affordable pricing has made them accessible to the smallest of businesses, and the least tech-savvy of users.
While enterprises grapple with the task of shifting their legacy HR systems to the cloud or thinking over the cost, complexity, and business downtime of ripping one system out and replacing it with another, startups and small businesses have been adopting this software in their masses.
With this in mind, we at GetApp - a startup ourselves with an agile, cloud-based HR system - wanted to find out just whether this would hold true for for our users - whether small businesses in different countries are really choosing these new entrants to the market over the big-name brands.
To test this theory, we used data from the “I Use This” feature on the GetApp website (screenshot below) to find out what is the most popular HR software among our users. (For a detailed methodology on the way that we collected and analyzed this data, see the methodology section at the bottom of the article.)
The approach we took to this was two-pronged: we looked at apps used by different business sizes - varying from solopreneurs to companies of up to 1000 employees - and also at software used in different countries (the U.S., UK, and Canada) to see what insights we could glean.
We grouped together HR apps of all flavors - from talent management, to scheduling, to performance management, and more - to analyze the approach that companies are currently taking towards managing their human resources.
Businesses with 1-50 employees favor newer, more agile HR apps, with lower pricing points
Companies with 51 employees and more look for more well-known HR names, combined with innovation
Businesses are still adopting point solutions for areas such as recruitment , rather than all-in-one HR apps
Adoption of learning management systems is much higher in companies with more than 500 employees
Outside of the U.S., companies favor local HR solutions.
When splitting HR app usage according to business size, what became apparent was that there is no clear market leader for companies of up-to 1,000 employees. Each size of business had its own preferences, with no runaway leader in any category. This differs from other industries such as accounting, where a few big-name vendors dominate.
There is also no mention of the legacy HR heavyweights that were initially built on premise, such as Oracle, ADP, SuccessFactors (now part of SAP) - or newer cloud-based market leaders such as Workday. Halogen TalentSpace is the only HR app popular among GetApp users to feature in analyst firm Gartner’s Magic Quadrants for HCM or Talent Management, which are focused on the enterprise market. Businesses across the board (up to 1,000 employees) are favoring newer, native cloud software for the HR market.
Where we can see a trend start to emerge is in the type of HR apps used by businesses of less than 50 employees, compared to companies of 51-500, and then again with organizations of 501-1000 employees. We’ll dive into these trends in more depth now.
When looking at the apps used by businesses of 1-10 employees and 11-50 employees, the most used HR software is consistent, with Zoho Recruit, Breezy HR (formerly Nimble HR), Workable, and Crelate Talent all featuring in the top five for both company sizes.
Delving more deeply to find out why this may be, we noticed that all these HR apps all recent entrants to the market. Breezy HR was founded in 2014, Workable in 2012, Crelate Talent in 2012, and while Zoho as a company was founded in 1996, Zoho Recruit was a more recent addition in November 2009.
All of these apps are natively built for the cloud, cater to small businesses, and market themselves as relatively straightforward and simple software.
Another similarity with the most popular HR software for businesses of 1-10 and 11-50 is pricing. Several solutions offer a free option with limited features, making them useful for startups and small businesses with budget constraints.
In terms of Zoho Recruit pricing, it currently (as of April 2017) offers a free plan for one recruiter with basic ATS functionality, such as scheduling interviews. Even for the most expensive price plan, it’s only $50 per recruiter per month. Zoho can also be seen as a safe pair of hands, with its long company history and large suite of products.
Breezy HR keeps its pricing plans simple, with all of them including unlimited users and candidates. The plans differ according to the number of active jobs. As of April 2017, for one active job, the HR app is free.
While Crelate Talent doesn’t offer free options, its pricing is affordable for small businesses.
Hiring platform Recruitee - one of the most used apps by businesses of 11-50 employees- doesn’t offer a free version, but has competitive pricing options covering the varying needs of different company sizes. It’s still a very new company - set up in mid 2015 - but has already been garnering a lot of positive coverage in publications such as Entreprenuer and Inc.
Workable doesn’t cater solely for this end of the market, but its simple tools, mobile-first approach, and raft of integrations make it an attractive choice for small businesses.
Zenefits is the only piece of software on the list (third most popular HR app by businesses of 1-10 employees) that isn’t strictly targeted at simplifying recruiting or talent management. While it originally focused on benefits management, it has since expanded to cover onboarding and employee scheduling. Despite experiencing several scandals and setbacks in 2016, Zenefits emerged as the most well-funded HR tech company in 2016.
Key takeaway: Businesses with less than 50 employees broadly go for the same kind of HR apps that are cloud-based, have affordable pricing plans (often with a free version), and are relatively new to the market.
As the business size grows, the trend swings towards HR software that, while more established than the above startups, is still making waves in the industry due to its innovation and high-profile customers. The most popular HR software for this company size also caters for a wider range of business sizes than the favored apps for businesses of 50 and under.
While Greenhouse is a relatively new entrant to the market (founded in 2012), thanks to a raft of positive media coverage and some high profile customers (Airbnb, Evernote, and Pinterest), it has already made a name for itself in the recruitment industry. Part of Greenhouse’s strategy is based around having an open platform that easily integrates with any other tool you might use for recruitment.
Analytics-driven recruiting platform Jobvite has been around longer (since 2006), and is aimed at both small businesses and enterprises. The app also boasts an impressive client roster, including LinkedIn, Spotify, Etsy, and Verifone. Jobvite’s product offering aims to cover everything from sourcing to hiring to onboarding.
The company continues to innovate by partnering and adding new features, such as integrating with Accurate Background services to allow companies to carry out employment background checks, drug testing and verification services from within Jobvite.
Workable is the one constant across businesses all the way up to 500 employees, as it is another app that caters for a wide range of business sizes
HR suite adoption
This contrasts with the higher adoption of recruitment of recruitment and talent management suites among smaller businesses, and a focus on learning management systems in businesses of more than 500 employees (more on that later).
Key takeaway: Businesses of 51-500 look for software that caters for a wide range of business sizes, and that may already have well-known clients. They also put more emphasis on all-in-one HR systems.
The trend we see as company size increases is to go for software from more established companies that have been on the market for longer. One example of this is Bullhorn, which is favored by companies of 500 employees and over. Bullhorn originally made a CRM for staffing and recruiting firms, before moving into applicant tracking systems.
Further evidence of this is Halogen TalentSpace, which is the fourth most popular app among companies of 201-500 employees. This software, which came to market in 1996, is regularly named as a visionary in Gartner’s Magic Quadrant for talent management. Testament to its success, it was acquired by Saba in early 2017.
Another data-driven recruitment app that is popular with larger businesses is JazzHR (fourth most popular among businesses of 501-1000 employees). Formerly known as The Resumator, it positions itself as a scalable recruitment system, suitable for small businesses but also applicable for growing companies.
Emergence of LMS
Learning management system software makes its first appearance in the most used apps among companies of 501-1000. Mindflash and Accord LMS’s appearance on the list at this points suggests that smaller businesses may be slower in their adoption of LMS.
Key takeaway: Businesses of 501 employees and up tend to favor more well-known and established HR software, and they also start recognizing the importance of learning management systems.
Using data from the U.S., UK, and Canada across all businesses from 1-1000 employees, we found that Breezy HR and Zoho Recruit were particularly popular among GetApp users in all three of these countries.
Zoho Recruit was a favorite in both the U.S. and U.K. (even placing just out of the top three in Canada), while Breezy HR was popular among users from both the U.S. and Canada.
Given the wide range of choices for apps headquartered in the U.S., it was interesting to see India-based Zoho Recruit there in addition to U.S.-based Breezy HR and Crelate Talent.
Looking at the choices for Canada, Toronto-based hiring solution Fitzii is popular among businesses in this country, suggesting that there is a preference for local software providers in the HR market, or at least those that have a strong presence there.
Further confirming this, Bullhorn is the second most popular HR software in Canada. While it may not be based in Canada, it has a strong presence in the country, through its partnership with Workopolis, which is Canada’s leading career website. It also already provides applicant tracking functionality to many leading firms based there, and has an office in Vancouver.
In the UK, aside from Zoho Recruit, Workable and Calamari leave management software are the most popular HR software in the country. While neither of these companies are British, both were founded in Europe and have a strong presence in London.
Workable was founded in Athens, but opened an office in London shortly after, before expanding to New York, Boston, and now San Francisco.
However, a plethora of British-based HR software companies such as CakeHR, CIPHR, WeThrive, PARIM, and Findmyshift just missed the top three position, further highlighting the preference for local companies in the market.
Key takeaway: In markets outside of the U.S., countries are showing a strong preference for local software to help manage recruiting and HR needs.
Our findings from analyzing data from GetApp users indicated that the original hypothesis was true: that small to medium businesses in the HR space are opting for new entrants to the market over the more-established brand names, and that they are choosing apps built for the cloud.
Our data also indicated that these companies prefer HR apps based in their own country, or that have a very strong presence there.
If, after reading this report, you’d like to invest in a cloud-based HR app for your business size or from your country, we can help. Here are the next steps.
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To put together this report, we analyzed data from signed in GetApp users that had selected the “I Use This” option for a particular app on the site. We counted the number of individual users that had selected these apps and segmented according to business size and country. The sample size for each segment differed and we used absolute numbers on our graphs to represent the most used. We then looked into the three most used apps per country, and five most used per business size.